According to the Autorité des marchés financiers (AMF), David Baazov and two associates made attempts to pump up the price of Amaya shares as the company prepared for its $4.9 billion takeover of PokerStars. Quebec’s securities regulator made those allegations in a new court filing that included the prosecution’s trial book for the case, which is scheduled to begin on Dec. 11.

Regulators say that David Baazov and two associates schemed to raise Amaya’s stock price before the company acquired PokerStars. (Image: Christinne Muschi/Reuters)

The trial book is an outline of the prosecution’s case against Baazov. And while it was made public as a part of the recent court filing, The Globe and Mail reports that the document dates to May 15 of this year. Information in the book includes a brief overview of the evidence the AMF plans to present, as well as an outline of their arguments and the names of witnesses they intend to call.

Dodgy Stock Buys

The crux of their case appears to tie Baazov, the former CEO of Amaya (now The Stars Group), with Benjamin Ahdoot, a childhood friend who served as Amaya’s vice president of government projects, and Toronto financier Yoel Altman.

The AMF says that the trio conspired to buy up stock in Amaya in April and May of 2014 in order to combat a slide in the company’s share price. In addition, regulators say this was done with the insider information that Amaya had already been making progress in its negotiations with the Oldford Group to acquire internet poker giant PokerStars.

In 2014, Amaya was facing financial strain following three years of losses. The company’s stock price was as high as $8.99 a share early in the year, but fell to $5.81 in mid-April following a poor earnings report.

Smoking Email?

AMF contends that communications between Baazov and Altman show they were both concerned with the falling stock price.

“We just need to get ahead of these shorters and prop desk guys like we have done before,” Altman wrote to Baazov in an e-mail cited in the court filing.

In the months that followed, Amaya’s stock nearly tripled in value, rising to $14.08 per share before the PokerStars acquisition was finally announced in June. That happened with double the trading volume seen for Amaya stock in the months before that period.

The AMF also alleges that Diocles, an investment company controlled by Altman, bought at least $2.25 million in Amaya shares. This happened alongside $1.4 million being transferred from Amaya to Diocles, which Altman would later bill as consulting services.

These claims go much further than the AMF’s initial allegations, which simply alleged that tips about the upcoming purchase of PokerStars may have helped fuel interest in Amaya’s stock.

Baazov is facing five counts of securities fraud as a part of the case against him. However, he and five other defendants have filed a motion to stay the proceedings, saying that the AMF has failed to minimize delays and that the defense team needs months to pour over the 3.7 terabytes of data that the regulator released as part of their Project Bronze investigation.

According to Baazov’s lawyers, these delays may be cause to dismiss the case entirely. A recent Canadian Supreme Court ruling laid out an 18-month timeframe recommendation for provincial cases. The Baazov case is already expected to take at least 28 months to complete.